Home Depot's Q1 sales rise 9% from year-on-year

May 17, 2016, 2:00 PM EDT
(Source: Mike Mozart/flickr)
(Source: Mike Mozart/flickr)

Home Depot's Q1 sales rose 9% from year-on-year, topping expectations.

CBS News reports:

Home Depot (HD) topped expectations for the first quarter thanks in part to mild weather and the company, riding a strong rebound in housing, lifted its outlook for the year. Shares neared an all-time high before the opening bell Tuesday.Americans are plowing money into homes as prices continue to rise. In its most recent report, the Standard & Poor's/Case-Shiller 20-city home price index rose 5.4 percent and the National Association of Realtors' seasonally adjusted pending home sales index rose 1.4 percent to 110.5, the highest level since May 2015. On Tuesday the Commerce Department will report on April U.S. home construction. Ground breakings are running ahead of last year's pace, largely because of a dramatic increase in the construction of single-family homes. For the three months ended May 1, The Home Depot Inc. earned $1.8 billion, or $1.44 per share, easily surpassing per-share projections for $1.33, according to a survey of analysts by Zacks Investment Research. It also topped last year's quarterly profit of $1.58 billion, or $1.21 per share.

The Wall Street Journal writes:

Sales at existing Home Depot stores rose 6.5% in the three months ended May 1, including a boost from big-ticket items. The number of transactions over $900 rose 9.5% compared with a year ago, primarily from sales of appliances, roofing materials, sheds and windows. The results stand in contrast to retailers like Macy’s Inc., Kohl’s Corp. and J.C. Penney Co.which reported sluggish sales last week, pummeling their shares. Those department stores reported steep drops in apparel sales and resorted to discounting to move unsold merchandise in the quarter, in part to compete with Amazon.com Inc. and off-price rivals.

CNN Money notes:

But the housing market has remained one of the brightest spots in the U.S. economy, which may help explain why consumers continue to invest in their homes. "Transactions for both new and existing homes are up on last year and activity remains fairly strong. This helpful tailwind is boosting demand for home improvement," said Håkon Helgesen, retail analyst at research firm Conlumino in a report. Warmer than usual temperatures may have also helped Home Depot in the quarter. CEO Craig Menear noted in the company's earnings release that Home Depot's results were favorably impacted by "week-to-week demand spikes caused by weather variability."